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Russian Economy Booms as Democracy Fades

Even as the Russian Federation moves toward greater and greater authoritarianism, the country?s economy seems on an upward track. The country?s Prime Minister, Mikhail Fradkov, signed this past Monday a draft federal budget for fiscal 2007 which predicts an economic growth level of at least six percent. Now signed, the Russian state budget has been submitted to the lower house of Russia?s parliament for approval. That parliament is filled with loyalists to current Russian president Vladimir Putin, and it is unlikely that the prime minister approved of the budget without Mr. Putin?s consent.

It is expected by many Russian revenue forecasters that real calculable revenue next year will reach some $263 billion, as opposed to the government-projected revenue expectations of just $207 billion dollars. Some in Russia would like to see the country?s currency, the ruble, compete with such other world currencies as the dollar, pound, and the euro. Russia?s booming economy is heavily based on energy trade, and earlier this August, Finance Minister Alexei Kudrin warned against Russia?s ever-growing dependence on oil and natural gas revenues.

Kudrin has said this dependence has already reached alarming levels. According to reports, the Russian economy expanded by 6.4 percent in 2005 as the nation`s coffers grew thanks to the rising price of oil ? surely an example that causes discomfort for the Russian finance minister. The Russian Federation is the second world`s largest oil exporter after Saudi Arabia, and supplying about 25 percent of the total gas consumed in the neighboring European Union. Russia?s economic growth has coincided with its backtracking on democratic reforms, much to the chagrin of EU officials in Brussels and American officials in Washington.